JUNIPER NETWORKS, INC. SEVERANCE AGREEMENT
EXHIBIT 10.2
JUNIPER NETWORKS, INC.
This Severance Agreement (the “Agreement”) is made and entered into by and between Xxxxx
Xxxxxxx (the “Employee”) and Juniper Networks, Inc., a Delaware Corporation (the “Company”),
effective as of August 14, 2007 (the “Effective Date”).
RECITALS
1. The Compensation Committee believes that it is imperative to provide the Employee with
certain severance benefits upon certain terminations of employment. These benefits will provide
the Employee with enhanced financial security and incentive and encouragement to remain with the
Company.
2. Certain capitalized terms used in the Agreement are defined in Section 6 below.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto
agree as follows:
1. Term of Agreement. This Agreement shall terminate upon the later of
(i) January 1, 2012 or (ii) if Employee is terminated involuntarily by Company without
Cause prior to January 1, 2012, the date that all of the obligations of the parties
hereto with respect to this Agreement have been satisfied.
2. At-Will Employment. The Company and the Employee acknowledge that the
Employee’s employment is and shall continue to be at-will, as defined under applicable
law, except as may otherwise be specifically provided by applicable law or under the
terms of any written formal employment agreement or offer letter between the Company
and the Employee (an “Employment Agreement”). This Agreement does not constitute an
agreement to employ Employee for any specific time.
3. Severance Benefits and Obligations.
(a) In the event the Employee is terminated involuntarily by Company without Cause,
as defined below, and provided the Employee executes a full, effective release of claims,
substantially in a form attached hereto as Exhibit A (“Release”), promptly following
termination, the Employee will be entitled to receive the following severance benefits in
a lump sum (less any withholding taxes): (i) an amount equal to six months of base salary
(as in effect immediately prior to the termination) (ii) an amount equal to half of the
Employee’s annual target bonus (as in effect immediately prior to the
termination) for the fiscal year in which the termination occurs and (iii) to the
extent permitted to be continued under COBRA coverage, Company-paid health, dental and
vision insurance coverage at the same level of coverage as was provided to such Employee
immediately prior to the termination and at the same ratio of Company premium payment to
Employee premium payment as was in effect immediately prior to the termination (the
“Company-Paid Coverage”) for the period described in this section. If such coverage
included the Employee’s dependents immediately prior to the termination, such dependents
shall also be covered at Company expense. Company-Paid Coverage shall continue until the
earlier of (i) six (6) months from the date of termination, or (ii) the date upon which
the Employee and her dependents become covered under another employer’s group health,
dental and vision insurance plans that provide Employee and her dependents with comparable
benefits and levels of coverage. For purposes of Title X of the Consolidated Budget
Reconciliation Act of 1985 (“COBRA”), the date of the “qualifying event” for Employee and
her dependents shall be the date upon which the Company-Paid Coverage terminates. The
severance payment in (i) and (ii) above to which Employee is entitled shall be paid by the
Company to Employee in cash not later than 30 calendar days after the effective date of
the Release. For purposes of this Agreement, “Cause” is defined as: (i) willfully engaging
in gross misconduct that is demonstrably injurious to Company; (ii) willful act or acts of
dishonesty or malfeasance undertaken by the individual; (iii) conviction of a felony; or
(iv) willful and continued refusal or failure to substantially perform duties with Company
(other than incapacity due to physical or mental illness); provided that the action or
conduct described in clause (iv) above will constitute “Cause” only if such failure
continues after the Company’s CEO or Board of Directors has provided the individual with a
written demand for substantial performance setting forth in detail the specific respects
in which it believes the individual has willfully and not substantially performed the
individual’s duties thereof and has been provided a reasonable opportunity (to be not less
than 30 days) to cure the same.
(b) In the event Employee terminates her employment voluntarily for Good Reason, as
defined below, and provided the Employee executes a full, effective release of claims,
substantially in a form attached hereto as Exhibit A, promptly following termination, the
Employee will be entitled to receive the following severance benefits in a lump sum (less
any withholding taxes): (i) an amount equal to six months of base salary (as in effect
immediately prior to the termination), (ii) an amount equal to half of the Employee’s
annual target bonus (as in effect immediately prior to the termination) for the fiscal
year in which the termination occurs, (iii) to the extent permitted to be continued under
COBRA coverage, Company-paid health, dental and vision insurance coverage at the same
level of coverage as was provided to such Employee immediately prior to the termination
and at the same ratio of Company premium payment to Employee premium payment as was in
effect immediately prior to the termination (the “Company-Paid Coverage”) for the period
described in this section, (iv) provided no shares have otherwise vested under the
restricted stock unit award granted to Employee upon her initial employment with the
Company according to its terms, acceleration of vesting of such restricted stock units
equal to the total number of shares covered by such award, multiplied by the number of
full months of Employee’s service to the Company completed through the date of termination
divided by 48, and (v) provided no shares have otherwise vested
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under the stock option award granted to Employee upon her initial employment with the
Company according to its terms, acceleration of vesting of such options equal to the total
number of shares covered by such award, multiplied by the number of full months of
Employee’s service to JNI completed through the date of termination divided by 48. If the
aforementioned benefits coverage included the Employee’s dependents immediately prior to
the termination, such dependents shall also be covered at Company expense. Company-Paid
Coverage shall continue until the earlier of (i) six (6) months from the date of
termination, or (ii) the date upon which the Employee and her dependents become covered
under another employer’s group health, dental and vision insurance plans that provide
Employee and her dependents with comparable benefits and levels of coverage. For purposes
of Title X of the Consolidated Budget Reconciliation Act of 1985 (“COBRA”), the date of
the “qualifying event” for Employee and his or her dependents shall be the date upon which
the Company-Paid Coverage terminates. The severance payment in (i) and (ii) above to which
Employee is entitled shall be paid by the Company to Employee in cash not later than 30
calendar days after the effective date of the Release. For purposes of this Agreement,
“Good Reason” is defined as the Company’s business operations or financial condition
suffering a sustained material adverse effect as a result of any actions taken against the
Company or its current officers by any U.S. government agency in connection with the
inquiry into JNI’s historical stock option practices.
(c) In addition, in the event Employee voluntarily terminates her employment for any
reason other than for Good Reason, or if her employment is terminated by the Company with
Cause, prior to the one (1) year anniversary of this Agreement, Employee will be
responsible for repayment of the $250,000 hiring bonus to the Company (as described in
Employee’s offer letter dated August 3, 2007) on a prorated basis where the amount to be
repaid will be equal to the portion of the full year of service to the Company that is not
completed.
(d) Change of Control Benefits. In the event the Employee receives severance
and other benefits pursuant to a change in control agreement that are greater than or
equal to the amounts payable hereunder, then the Employee shall not be entitled to receive
severance or any other benefits under this Agreement.
(e) Internal Revenue Code Section 409A. Notwithstanding any other provision
of this Agreement, if the Employee is a “specified employee” under Code Section 409A and a
delay in making any payment or providing any benefit under this Plan is required to avoid
imposition of additional taxes under Code Section 409A, such payments shall not be made
until after six (6) months following the date of the Employee’s separation from service as
required by Code Section 409A.
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4. Successors.
(a) The Company’s Successors. Any successor to the Company (whether direct
or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) to
all or substantially all of the Company’s business and/or assets shall assume the
obligations under this Agreement and agree expressly to perform the obligations under this
Agreement in the same manner and to the same extent as the Company would be required to
perform such obligations in the absence of a succession. For all purposes under this
Agreement, the term “Company” shall include any successor to the Company’s business and/or
assets which executes and delivers the assumption agreement described in this Section 7(a)
or which becomes bound by the terms of this Agreement by operation of law. The term
“Company” shall also include any direct or indirect subsidiary that is majority owned by
Juniper Networks, Inc.
(b) The Employee’s Successors. The terms of this Agreement and all rights of
the Employee hereunder shall inure to the benefit of, and be enforceable by, the
Employee’s personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees and legatees.
5. Notice.
(a) General. All notices and other communications required or permitted
hereunder shall be in writing, shall be effective when given, and shall in any event be
deemed to be given upon receipt or, if earlier, (a) five (5) days after deposit with the
U.S. Postal Service or other applicable postal service, if delivered by first class mail,
postage prepaid, (b) upon delivery, if delivered by hand, (c) one (1) business day after
the business day of deposit with Federal Express or similar overnight courier, freight
prepaid or (d) one (1) business day after the business day of facsimile transmission, if
delivered by facsimile transmission with copy by first class mail, postage prepaid, and
shall be addressed (i) if to Employee, at his or her last known residential address and
(ii) if to the Company, at the address of its principal corporate offices (attention:
Secretary), or in any such case at such other address as a party may designate by ten (10)
days’ advance written notice to the other party pursuant to the provisions above.
6. Miscellaneous Provisions.
(a) No Duty to Mitigate. The Employee shall not be required to mitigate the
amount of any payment contemplated by this Agreement, nor shall any such payment be
reduced by any earnings that the Employee may receive from any other source.
(b) Waiver. No provision of this Agreement shall be modified, waived or
discharged unless the modification, waiver or discharge is agreed to in writing and signed
by the Employee and by an authorized officer of the Company (other than the Employee). No
waiver by either party of any breach of, or of compliance with, any condition or provision
of this Agreement by the other party shall be considered a waiver of any other condition
or provision or of the same condition or provision at another time.
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(c) Headings. All captions and section headings used in this Agreement are
for convenient reference only and do not form a part of this Agreement.
(d) Entire Agreement. This Agreement constitutes the entire agreement of the
parties hereto and supersedes in their entirety all prior representations, understandings,
undertakings or agreements (whether oral or written and whether expressed or implied) of
the parties with respect to the subject matter hereof.
(e) Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of California.
The Superior Court of Santa Xxxxx County and/or the United States District Court for the
Northern District of California shall have exclusive jurisdiction and venue over all
controversies in connection with this Agreement.
(f) Severability. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of any other
provision hereof, which shall remain in full force and effect.
(g) Withholding. All payments made pursuant to this Agreement will be
subject to withholding of applicable income and employment taxes.
(h) Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together will constitute one and the
same instrument.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the
Company by its duly authorized officer, as of the day and year set forth below.
| COMPANY | JUNIPER NETWORKS, INC. | |||||
| By: | /s/ Xxxxxxxx X. Xxxxxx | |||||
| Title: | Vice President and General Counsel | |||||
| Date: | August 29, 2007 | |||||
EMPLOYEE
|
By: | /s/ Xxxxx Xxxxxxx | ||||
| Title: | EVP and Chief Financial Officer | |||||
| Date: | August 29, 2007 | |||||
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Exhibit A
Form of Release Agreement
AGREEMENT
AND GENERAL RELEASE
AND GENERAL RELEASE
This AGREEMENT AND GENERAL RELEASE of claims (“Agreement”) is entered into by and between
Juniper Networks, Inc. (the “Company” or
“Juniper”) and
(“EEE”). In consideration of the
mutual promises contained herein, and for other good and sufficient consideration, receipt of which
is hereby acknowledged, the parties agree as follows:
(a) The Company agrees with EEE as follows:
1. The effective date of EEE’s termination of employment with Juniper (the
“Termination Date”) will be ___, or such earlier date as EEE may voluntarily
resign. As of the Termination Date, all payments and benefits which EEE is or would be
entitled to receive under this Agreement (other than amounts then accrued and owing)
shall cease at that time, subject to COBRA conversion rights and the payment of any
unused accrued PTO pay.
2. EEE’s stock options shall continue to vest through the earlier of the date EEE
voluntarily terminates EEE’s employment or the Termination Date. EEE’s ability to
exercise EEE’s vested options following the termination of EEE’s employment agreement
shall be governed by the provisions of EEE’s offer letter, stock option agreements and
the provisions of the stock option plans, as applicable, pursuant to which such options
were originally granted (the “Option Plan(s)”).
3. As of the Termination Date, EEE will be entitled to receive a refund of any
accrued but unused Employee Stock Purchase Plan (ESPP) contributions.
4. Provided this Agreement becomes effective and is not revoked under Section C10 and has not
been breached by EEE, (i) Juniper will pay to EEE within the later of three days after the
effective date of this Agreement or seven days after the Termination Date an amount equal to [the
amounts set forth in the applicable offer letter or severance or change of control agreement] and
(ii) with respect to the option for [___] shares of Common Stock granted on [___], the vesting
shall accelerate by to [the amounts set forth in the applicable offer letter, severance or change
of control agreement].
5. EEE shall return to the Company all Company documents and any other Company property which
EEE has in EEE’s possession, including, but not limited to, computer equipment, cellular telephone,
Blackberry, Secure ID card and corporate credit card, all software and technical documents,
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Company files, notes, drawings, records, plans and forecasts, financial information,
specifications, computer recorded information, tangible property, entry cards, identification
badges and keys; any material of any kind which contains or embodies any proprietary or
confidential information of the Company (and all reproductions thereof).
6. Unless otherwise indicated, all required and authorized payroll deductions
shall be withheld from all amounts to be paid to EEE under this Agreement. Except as
set forth in EEE’s offer letter, no unearned bonuses or other incentive compensation
will be due EEE. All unreimbursed travel and business expenses to which EEE is
entitled to reimbursement as of the Termination Date will be promptly paid to EEE after
submission of expense reports in accordance with standard Juniper policy.
(b) EEE for EEE, and for EEE’s heirs, executors, administrators, assigns, and successors,
agrees as follows:
(i) To forever fully release, remise, acquit and discharge the Company, its predecessors and
successors, and its subsidiaries, officers, directors, agents, attorneys, employees and assigns
(hereafter collectively referred to as “Releasees”), and covenant not to xxx or otherwise institute
or cause to be instituted or any way participate in (except at the request of the Company) legal or
administrative proceedings against Releasees with respect to any matter, including, without
limitation, any matter arising out of or connected with EEE’s employment with the Company or the
termination of that employment, including any and all liabilities, claims, demands, contracts,
debts, obligations and causes of action of every nature, kind and description, in law, equity, or
otherwise, whether or not now known or ascertained, which exist on or before the date that this
Agreement becomes effective under Section C 10(d).
1. That at all times in the future EEE will remain bound by the Juniper Employment,
Confidential Information, Inventions Assignment and Arbitration Agreement previously executed by
EEE (or any comparable employee inventions assignment and confidentiality agreement entered into
with Juniper or any of its subsidiaries or affiliates). EEE agrees that for a period of twelve (12)
months immediately following the termination of EEE’s relationship with Juniper, EEE shall not
either solicit, induce, recruit, interview, or encourage any of the employees of Juniper or any of
its subsidiaries, affiliates or parents, to leave their employment, or attempt to solicit, induce,
or recruit employees of Juniper or any of its subsidiaries, affiliates or parents, either for EEE
or for any other person or entity.
(ii) That EEE and the Company shall not make any negative or disparaging remarks about EEE or
as applicable, the Company, its officers, employees, directors, products, services or business
practices.
2. That EEE is waiving any rights EEE may have had or now has to pursue any and all remedies
available to EEE under any employment-related cause of action against Releasees, including without
limitation, claims of wrongful discharge, retaliation, emotional distress, defamation, fraud,
breach of contract, breach of the covenant of good faith and fair dealing, violation of the
provisions of the California Labor Code, the Employee Retirement Income Security Act, and any other
laws and regulations relating to employment or termination of employment. EEE further acknowledges
and expressly agrees that EEE is waiving any and all rights EEE may have had or now has to pursue
any claim of discrimination, including but
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not limited to, any claim of discrimination or harassment based on sex, age, race, national
origin, disability, or on any other basis, under Title VII of the Civil Rights Act of 1964, as
amended, the California Fair Employment and Housing Act, the California Constitution, the Equal Pay
Act of 1963, the Age Discrimination in Employment Act of 1967, as amended, and all other laws and
regulations relating to employment
3. Notwithstanding any other term in this Agreement, the release contained in this Agreement
shall not release (i) any obligations arising out of this Agreement, (ii) EEE’s right to
indemnification to the fullest extent provided for in any contract, document or statute, (iii)
EEE’s rights in and to any employee benefit plan (e.g. 401k Plan) to the fullest extent provided
for in the applicable plan, (iv) EEE’s right to apply for unemployment insurance, and (v) EEE’s
rights to EEE’s equity in the Company, including without limitation, EEE’s rights in and to her
Company stock certificates, EEE’s right to exercise stock options, and EEE’s right to sell or
otherwise dispose of her equity in the Company.
4. That EEE will not, except as may be mandated by statutory or regulatory requirements or as
may be required by legal process, disclose to others the fact or terms of this settlement, the
amounts referred to in this Agreement, or the fact of the payment of said amounts, except that EEE
may disclose that information to EEE’s immediate family members, attorneys, accountants, financial
planners, tax advisors, banks or financial institutions or other professional advisors to whom the
disclosure is necessary to effectuate the purposes for which EEE has consulted with such
professional advisors or institutions. EEE may also disclose this Agreement and the contents of
this Agreement to any government agency which requests a copy of this Agreement or the information
contained in this Agreement. EEE understands that this covenant of non-disclosure is a material
inducement to the Company for the making of this settlement and that, for the breach thereof the
Company will be entitled to pursue its legal and equitable remedies, including, without limitation,
the right to seek injunctive relief.
7. That at Juniper’s request, EEE will execute on or after the Termination Date, releases
essentially identical with those contained in Sections B1, B4 and B5 covering all periods through
the Termination Date.
B. The Company, on behalf of itself and its officers, directors and managing agents and EEE,
for himself/herself, and EEE’s heirs, executors, administrators, assigns, and successors, jointly
agree as follows:
1. That nothing contained in this Agreement shall constitute or be treated as an admission by
Releasees or EEE of liability, of any wrongdoing, or of any violation of law.
2. That if any provision of this Agreement is found to be unenforceable, it shall not affect
the enforceability of the remaining provisions and the court shall enforce all remaining provisions
to the extent permitted by law.
3. That except for the Employment Agreement, Confidential Information, Invention Assignment
and Arbitration Agreement (and any comparable agreement) between the Company and EEE and except as
expressly provided herein, this Agreement shall supersede and render null and void any and all
prior agreements between the parties. The parties further agree that this Agreement constitutes
the entire agreement between the parties regarding the subject matter of this Agreement, and that
this Agreement may be modified only in a written document executed by EEE and a duly authorized
officer of the Company.
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4. That, except as specifically set forth in this Agreement, this Agreement extends to all
claims of every nature and kind, known or unknown, suspected or unsuspected, past or present,
arising from or attributable to EEE’s employment with the Company or the termination of that
employment, and that the Company and EEE hereby expressly waive any and all rights granted to them
under Section 1542 of the California Civil Code (or any analogous state law or federal law or
regulation), which reads as follows:
A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of
executing the release, which, if known by him, must have
materially affected his settlement with the debtor.
5. That this Agreement shall bind and benefit EEE’s heirs, executors, administrators,
successors, assigns, and each of them; it shall also bind and benefit the Company and its
successors and assigns.
6. That this Agreement shall be deemed to have been entered into in the State of California
and shall be construed and interpreted in accordance with the laws of that state.
7. That should there hereafter be any litigation between or among any of the parties to this
Agreement alleging a breach of this Agreement or seeking enforcement of this Agreement, the
prevailing party in such litigation shall be entitled to recover its or its reasonable attorneys’
fees and costs of such litigation from the other party, providing that in all cases, each party
shall share bear responsibility for half of all JAMS filing and administrative fees, and half of
all arbitrator’s fees.
8. That each party hereby agrees to accept and assume the risk that any fact with respect to
any matter covered by this Agreement may hereafter be found to be other than or different from the
facts it believes at the time of this Agreement to be true, and agrees that this Agreement shall be
and will remain effective notwithstanding any such difference in fact.
9. That this Agreement may be executed in counterparts, each of which shall be an original,
but all of which together shall constitute one agreement. Execution of a facsimile copy shall have
the same force and effect as execution of an original, and a facsimile signature shall be deemed an
original and valid signature.
10. EEE hereby acknowledges and understands and EEE agrees that:
(1) EEE may have at least twenty-one (21) days after receipt of this Agreement within which
EEE may review and consider it, discuss it with an attorney of EEE’s own choosing, and decide to
execute or not execute this Agreement;
a) EEE has seven (7) days after the execution of this Agreement within which EEE may revoke
this Agreement;
b) In order to revoke this Agreement, EEE must deliver to the Company’s General Counsel,
Xxxxx Xxxxxx, on or before seven (7) days after the execution of this Agreement, a letter stating
that EEE is revoking this Agreement; and
c) This Agreement shall not become effective or enforceable until after the expiration of
seven (7) days following the date EEE executes this Agreement.
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11. That they have read and understand this Agreement, and that they affix their signatures
hereto voluntarily and without coercion. EEE further acknowledges that EEE has at least twenty-one
(21) days within which to consider this Agreement, that EEE was advised by the Company to consult
with an attorney of EEE’s own choosing concerning the waivers contained in and the terms of this
Agreement, and that the waivers EEE has made and the terms EEE has agreed to herein are knowing,
conscious and with full appreciation that EEE is forever foreclosed from pursuing any of the rights
so waived.
12. EEE has no duty to mitigate any breach by the Company of this Agreement, nor shall any
such payment required by this Agreement be reduced by any earnings that EEE may receive from any
other source.
Dated: |
||||||
| EEE | ||||||
| Dated: | Juniper Networks, Inc. | |||||
| By: | ||||||
| Title: Vice President and General Counsel | ||||||
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